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China is curbing steel production, but familiar economic pressures are testing its spirit

Hong Kong — A two-month decline in China’s steel production ordered by economic authorities has handed Beijing a global showcase to advance climate targets and manage commodity markets. The slowdown in the brewing economy is testing the government’s willingness to maintain reductions.

China’s crude steel production, half of the world’s annual total, fell in July, the widest year-on-year since the 2008 global financial crisis. Early indicators suggest that it may slip again this month. State inspections and other official regulations at factories across the country are often subject to global trade and environmental tensions, usually a phenomenal trend, from a record high in May to 12.5 million tonnes in July. It decreased (about twice the annual total in the UK).

Iron ore price cuts have reduced global iron ore prices by 40% since mid-July, with China winning two victories. This is a sign of policy leadership ahead of the major climate summit in Glasgow in November and a demonstration of its ability to depress rising global commodities. price. Beijing has set a national goal of ensuring peak carbon emissions by 2030. The target for the steel sector is 2025, the second-largest source of emissions in China after power companies.

China’s largest producer, Baosteel Group Chairman Chen Derong, said at this month’s meeting, “We must resolutely implement an output cut policy. This is a political issue and cannot be negotiated. “. Also this month, Climate Envoy Fahrenheit said China will adhere to its emission targets and announce it in Glasgow.

But as the economy slowed as the Covid-19 surged again, China’s top brass began to offer some room for sway. Xi Jinping President in late July of the high-level meeting chaired warned against climate measures “campaign-style”. State media has weighted “unrealistic pledges” to discourage them.

China is curbing steel production, but familiar economic pressures are testing its spirit